The interest rate that sets the present value of a project's cash inflows equal to the present values of the project's cost is called the accounting rate of return.

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The interest rate that sets the present value of a project's cash inflows equal to the present values of the project's cost is actually the internal rate of return (IRR). The accounting rate of return is a different metric that measures the profitability of a project by comparing the average income generated by the project to the average investment in the project.

The Interest Rate That Sets the Present Value of a Project's